Netbook: Its Own Evolving Category or Just a "Low-End Notebook"?

It goes without saying that we're in the middle of an economic slump, and PC sales are suffering. But hardware makers are managing to navigate their way through the economic downturn, specifically by turning more and more to mini-notebooks—or netbooks. Starting from essentially zero market penetration in late 2007, by the end of 2008, roughly 10 million netbooks have shipped, according to IDC. They now account for 7 percent of all portable PCs.

"Low-priced mobile PCs led market growth in the United States. Mini-notebooks did well in the challenging economic environment, where consumers' number one priority was to save money," Mikako Kitagawa, Gartner principal analyst, explained in a statement.

Netbooks are surging. At first, vendors thought of them as a way to sell cheaper, less powerful alternatives to notebooks, but netbooks have gradually come into their own—and now we're almost to the point where netbooks can be taken as seriously as their larger, weightier brethren.

Witness last week's announcement from NVIDIA and Acer of the world's first NVIDIA ION-based "nettop"—a netbook wielding the power of a full desktop—the Acer AspireRevo. No larger than a typical hardcover book, the AspireRevo is a fully capable desktop with advanced graphics and impressive multimedia features. Equipped with NVIDIA ION graphics, the system can handle a wide variety of computing needs, including HD video, web surfing, and other intensive tasks that you might expect from full-sized systems.

"The AspireRevo is small enough to go anywhere, yet big enough to handle all the needs of your digital lifestyle," said Gianpiero Morbello, corporate vice president of marketing for Acer.

What are the repercussions for the hardware market? Stephen Baker, vice president of industry analysis for the NPD Group, said "The unfortunate aspect is we're bringing these products out in a recession, which is likely to mean it's harder to (sell) these as an additional PC and not as a replacement for something else you're going to buy," said Baker.

We seem to be in the midst of a very fast, recession-motivated PC evolution.

But is the definition of a netbook blurring? Intel launched the device with its Atom chip, which promised less computing power for far less cost. Intel and One Laptop Per Child led the way with low-cost notebooks intended for developing nations. But Asus broke the category open for consumers in late 2007 with its Eee PC, at first equipped with a tiny 7" screen, tiny keys, solid-state memory, and Linux instead of Windows. Now we have quite a few interpretations of what a netbook is.

Acer and Asus might agree that a netbook is a low-power notebook with a 9" screen, selling for $300 to $400. But Dell has its own definition, considering its Mini 12, which sports a 12" screen. Vendors tend to write their own definitions in the category, perhaps trying to pull netbooks into the notebook category, which—naturally—is feeling a bit threatened.

In an interview last week, former Seagate CEO William Watkins supported that notion: "A netbook is just a low-end notebook."

What do you think? Are netbooks the future? This industry always evolves toward smaller and less expensive. If netbooks can continue to harnass great computing power—as with the Acer AspireRevo—I think there's no stopping them. And that means a lot of PC manufacturers are going to see a lot of upheaval in their business models.